Here's why Tesla is the hottest stock of 2020

Ross Gerber, Gerber Kawasaki CEO joins Yahoo Finance Live to break down why Tesla is the best performing stock year-to-date.

Video Transcript

BRIAN CHEUNG: Welcome back to Yahoo Finance Live. And, you know, I'm taking a look at my calendar right now. It looks like it is March 298, which means that 2020 is almost over. So let's take a look at the biggest movers to the upside over the course of this year. And of course, we're talking about Tesla. The Dow Jones has been up about 5% since Tesla's five-for-one stock split in August. But Tesla, it's been up about 45%.

Ross Gerber, he's the CEO of Gerber Kawasaki. He's a bull on the stock, and he joins us to break down their story as the hot stock in 2020. And Ross, it seems like the catalysts just keep coming. And I want to start off with that news of, what else, an Elon Musk tweet. There was a suggestion that he had toyed with the idea of actually selling entirely to Apple in 2017 but that, apparently, Tim Cook refused to meet.

So Ross, with Apple reportedly trying to get the wheels up on its own project maybe by 2024, is that a downside risk for Tesla as we head into the new year?

ROSS GERBER: No. Actually, it's actually a downside risk for Apple with another product that they end up not launching. I don't take a lot of credence with the reports yesterday that Apple's actually going to finish the electric car any time. But I think, ultimately, Tesla is trying to drive sustainable transportation, we want as many EV players in the world to take up this business and grow it. And Tesla will be a leader.

So I think all the other car companies are just going to help drive consumers to Tesla as the main EV brand. But there's room for many, many others.

ALEXIS CHRISTOFOROUS: Ross, I'm curious who those others might be in your eyes. Who can be a formidable competitor to Tesla? If you're-- you're telling us basically you don't have much faith in Apple's EV car making it to market. Who else out there might?

ROSS GERBER: OK, so there is competition coming in, and it's from China. And China has allowed Tesla to build their factory there and become a major player in the EV market there. But some of the Chinese companies are making a lot of strides in building great EV cars and being able to do it in scale. But also on the technology and the battery side, this is where we're investing a lot of money now into Chinese cell manufacturers and battery development.

This is a huge opportunity in China as a leader here. So we see competition coming there. And then we see a little bit on the horizon with companies like Lucid, which have a beautiful car and the ability to make them, as well as companies like Rivian, which I think, you know, the pure EV all-in companies will be companies that I hope will be successful and competitors over the long term.

But on the short term, none of them are even close to production.

BRIAN CHEUNG: Ross, so let's talk more about the long term. You were talking about China there now. It seems like there are many other catalysts along the way. We were talking with Tasha Keeney over at ARK a few days ago, and she was saying that the real big story is going to be the robocall taxi service.

So what do you think, if you had to pick one, which is the biggest catalyst for Tesla, let's say, over the next five-year period?

ROSS GERBER: You know, I don't want to discount the ARK thinking because I love them, and I think they're geniuses. I see this robo taxi thing further along on the horizon that would be more of a catalyst five years from now than in the next year or two. The real catalyst moving forward in my mind is taking this full self-driving just as a feature and adding margin to the car, which they're hopefully going to release any day.

And then secondly, trucks. There's so many semi trucks and pickup trucks in America. It is a huge market for Tesla. Tesla Texas is going to be the crown jewel of the Tesla Terafactories in making cells, battery packs, all the way into trucks that will be the most incredible powerful electric trucks ever built. So I see that as the short-term catalyst.

So in a year, we expect Texas to be up, and then within 18 months, trucks being delivered in scale. So, you know, this is an exciting time for Tesla because that market is enormous.

ALEXIS CHRISTOFOROUS: I want to get back to this Apple idea for a minute. I can't seem to shake it, Ross. If they're not--

ROSS GERBER: Why?

ALEXIS CHRISTOFOROUS: --going to come up with a car, and you're not alone in thinking that, could it be that they assist the EV market either with software and/or batteries ? Because they're talking about these monocell batteries that many are saying would be cheaper to make and have a longer range, charge range. So might we see Apple still in the EV space but not with a car proper?

ROSS GERBER: OK, you know, this iPhone, it dies every day by noon, OK? If they could make a battery, that would be phenomenal. It would be phenomenal. But they can't make a battery. I don't know why anybody would think Apple would innovate anything with batteries because they literally are the worst at batteries.

So the fact of the matter is Elon has created a new battery cell structure, and it is the best, most incredible thing I've ever seen. So that's where the focus is. This report that Apple supposedly has improved battery technology, you know, seems very questionable to me. That's just my thought process.

But like, the fact of the matter is Tesla is the one driving innovation in this technology, and Apple is not driving any innovation other than they made some new headphones and they're gouging app people. I love Apple, I'm a shareholder of Apple, but innovation isn't their thing.

BRIAN CHEUNG: All right, well, Ross Gerber, CEO of Gerber Kawasaki. You know, they might change the shape of the ports in that thing again too, if that's how they're going with it.

ROSS GERBER: Maybe add a USB port. I'd like them to add USB ports to my computer. That would be nice.

BRIAN CHEUNG: USBC. Ross, thank you so much for joining us.